Is Hillary Clinton’s free college tuition plan feasible?

Three faculty experts parse the details of the Democratic nominee’s education proposal.

By Kara Baskin |
August 4, 2016

Democratic presidential nominee Hillary Clinton’s campaign platform promises free public college and university tuition for families earning under $125,000 per year in states that agree to provide matching funds.

Is this feasible? Will it actually help lower-income students? What are the policy implications? We asked three MIT Sloan faculty experts to discuss the pros and cons.

A solid plan, if students would perform social service to get tuition credit

Charles Kane

I wish I had this when I was in college!

What would be great is if the plan could be used to encourage students to work, for instance in the Peace Corps or the military, so the government is spending money toward what is, in my opinion, the most important part of education. This service is the backbone of any economy and any social structure. If people who took advantage of the plan could serve the government in the military or through a social cause, it would also have more chance of passing in an otherwise hampered Congress and Senate.

So I’m in favor of Clinton’s plan with that caveat, so the government isn’t just dishing out money. This way, if a person takes the credit, it’s a sign they’re committed to going to college—they have some kind of test of intent.

There should be a year of service for anyone, really; it’s a step in the right direction for a good job, irrespective of income. I go out of my way to hire people from the Peace Corps or the military—it indicates a tremendous work ethic.

I’m agnostic on it. The proposal is broad and amorphous in its current form, and the devil is in the details—that’s my primary observation.

Many policy questions need to be addressed: To what extent will states be required to share in the cost? And related to that, would there be deeper subsidies in high-cost states?

If you look at the cost of tuition at public universities across the country, there’s great variation. In some states it is as low as $5,000, while in others it’s three or four times greater than that. Moreover, Clinton’s proposal addresses families making under $125,000. That’s a high threshold in some parts of the country, but in many urban areas, $125,000 is by no means a clear indication of wealth. How will that be accommodated?

Free public college tuition could also widen the class gap, as private universities could increasingly become the near-exclusive domains of students from high-income families.

Also, would there be price controls to limit tuition increases? Applying basic microeconomics to Clinton’s plan, lower costs will increase demand and create upward pressure on colleges in terms of applicants. With more applicants and students, how would the federal government limit tuition increases? Would other forms of financial aid, such as Pell Grants and student loans, remain available for students at private universities and also for non-tuition costs at public schools?

As a budget wonk, I wonder: What will this cost taxpayers and how does it compare with other policy options designed to improve access to higher education? Would expanding the Pell program and devising more innovative loan repayment options accomplish the same goals at a lower cost? Again, the details are critical for making a full assessment of the proposal.

It’s clear that in today’s economy, people need a college degree, with an asterisk: College graduate wages have been stagnant, and the big payoff is actually in a post-college degree—which you can’t get without a college degree. And even with stagnant wages, college graduates are still much better off than those without post-secondary credentials. And college is completely unaffordable for most people if they pay the full cost.

Fundamentally, Clinton’s plan is sensible, with a threshold of $125,000 family income, a state-funds matching requirement, and a requirement that students also work.

What’s missing is improving the content of higher education. The most important challenge here touches on community colleges. Community colleges have been invisible, and they need to be on the policy radar. Roughly half of people in post-secondary education attend community college. These students have the most difficulty: They’re poorer, and the graduation rates are terrible. Six years after entrance, only one quarter end up getting a certificate or a degree, and another 10 percent transfer to a four-year school.

Community colleges need to receive more resources. In addition, there are organizational issues: poor advising, disorganized curricula, too many part-time teachers. An additional challenge is reforming remedial education. Too often students enter remedial programs, exhaust their financial aid, and drop out without attaining any credit.

The bottom line is that we need to focus the same attention that has been on K-12 improvement on community college improvement, too.

-- Paul Osterman, professor of human resources and management and co-director of the MIT Sloan Institute for Work and Employment Research